Canadian gas exports come off peak

While forecasters remain at odds over the outlook for Canadian natural gas exports to the United States, last year’s drain on producers is now evident.

Canada’s National Energy Board said revenues from shipments south of the 49th parallel slumped C$8.47 billion, or 24 percent to C$27.11 billion, from the 2005 record year.

Export volumes were off almost 5 percent to 3.5 trillion cubic feet — the lowest level since 2003 and the second lowest since the turn of the century.

The board said that what took the biggest bite out of export returns was a 19 percent drop in average prices to C$7.15 per gigajoule.

Only June and July produced better results than comparable months of 2005.

All major U.S. importing regions posted declines — the Midwest dropped 60 billion cubic feet to 1.48 tcf; the Northeast lost 7 bcf to 1.19 tcf; the Pacific Northwest was down almost 41 bcf to 399.6 bcf; and California recorded a 10.4 bcf drop to 422.6 bcf.

Overall Canadian production showed a slight rise to 6.05 tcf, putting export levels at 58 percent of output.

Now attention shifts to the forecasts.

The Conference Board of Canada is betting on exports rebounding this year by 2 percent, but the U.S. Energy Information Administration is predicting an identical loss amounting to about 180 bcf.

But, over the 2008-2011 period, the two organizations are on the same wave-length, with the conference board expecting an average annual slippage in exports of 2.7 percent.

A spokesman for the EIA, speaking at a recent gas conference in Calgary, said net pipeline shipments into the U.S. should run in the range of 2.6 tcf and 3 tcf to 2013, before starting a slide as Alberta resources shrink, domestic Canadian demand rises and the potential for unconventional and tight gas production contracts.

—Gary Park